Indian Overseas Bank (IOB) has reduced its lending rates effective 15 December, following the Reserve Bank of India’s cut in repo rate by 25 basis points.

The state-owned bank has reduced its external benchmark lending rate (EBLR) by 25 basis points to 8.10% from 8.35% earlier.

Additionally, the bank's Asset Liability Management Committee (ALCO) has approved a 5-basis-point reduction in the marginal cost of funds-based lending rate (MCLR) across tenors from three months to three years.

These revisions will lower equated monthly instalments (EMIs) for both existing and new borrowers whose loans are linked to these benchmarks, the bank said.

Retail customers seeking home, vehicle and personal loans will benefit from enhanced affordability. MSMEs and corporate borrowers will also experience a reduction in their cost of funds, aiding working capital requirements and supporting business growth, it added.